IOCE and MCE - JE Part A

CMS created two code editors to process UB-04 claims which are:

• Integrated Outpatient Code Editor (IOCE)
• Medicare Code Editor (MCE)

Integrated Outpatient Code Editor (OCE)

The Integrated Outpatient Code Editor (IOCE) program processes claims for all outpatient institutional providers including hospitals subject to the Outpatient Prospective Payment System (OPPS) and Non-OPPS hospitals, such as Critical Access Hospitals (CAHs). Within the IOCE there are currently 98 different edits used to validate claims and apply appropriate payment for both OPPS and Non-OPPS outpatient claims. The returned edit numbers are associated with reason codes viewable in Direct Data Entry (DDE) based on the specific CPT/HCPCS codes, modifiers and diagnosis codes listed on the claim. Providers can locate the 98 edits and the descriptions.

• Go to CMS OCE Quarterly Release Files
• Under desired quarter, select/open "IOCE QuarterlyDataFiles" 
• Within zip files, select "IntegOCEspecsV172_508.pdf"
• View "Table 4: Edit Descriptions"

Noridian has received numerous calls from providers indicating many providers have internal firewalls that prevent downloading of these documents. Providers must work with their internal IT staff to download these documents.

The IOCE functions on a single claim and does not have any cross claim capabilities. It will accept up to 450 line items per claim. Updates are made to the IOCE on a quarterly basis and the IOCE edits identify:

• Claim errors
• What claim actions are needed, if applicable
• Reasons why claim actions are necessary

IOCE assigns an Ambulatory Payment Classification (APC) number for each service covered under OPPS. In order to accommodate editing, the IOCE assigns status indicators to all lines and assigns payment indicators when all editing is passed allowing processing and payment on the services billed. Each lines' SI flags can be located in DDE or in the CMS Addendum B.

IOCE will:

• Compute payment
• Discount/package all services included in the APC payment
• Determine any payment adjustments required based on the APC

Providers can locate IOCE Software Installation and User Manual for PC

It is separated into ten chapters and five appendices.

• Go to CMS OCE Quarterly Release Files
• Under appropriate quarter, select/open "IOCE PC Software Package" 
• When zip file populates, select "IOCE.V172.R0.PC.Man_508.P.zip"
• Select "pbl021 IOCE v17.2 PC_508.pdf"

Note: Noridian has received numerous calls from providers indicating many providers have internal firewalls that prevent downloading of these documents. Providers must work with their internal IT staff to download these documents.

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Edit Dispositions

• Claim rejection - The provider can correct and resubmit the claim but cannot appeal the rejection.
• Claim denial - The provider cannot resubmit the claim but can appeal the denial.
• Claim return to provider (RTP) - The provider can resubmit the claim once the problems are corrected.
• Claim suspension - The claim is not returned to the provider, but it is not processed for payment until the fiscal intermediary/Medicare Administrative Contractor (FI/MAC) makes a determination or obtains further information.
• Line item rejection - The claim can be processed for payment with some line items  rejected for payment (i.e., the line item can be corrected and resubmitted but cannot be appealed).
• Line item denial - There are one or more edits that cause one or more individual line items to be denied. The claim can be processed for payment with some line items denied for payment (i.e., the line item cannot be resubmitted but can be appealed).

Medicare Code Editor (MCE)

The MCE is the inpatient code editor and is used to detect claim errors based on coding listed on UB-04 claims submitted to Medicare.

Access CMS MCE Manual

• Go to CMS Acute Inpatient Prospective Payment System (IPPS)
• In left hand navigation menu, select desired year for "FY IPPS Final Rule Home Page"
• In table, select desired year for  "FY Final Rule and Correction Notice Data Files" 
• Scroll to "Downloads" section
• Select "Definition of Medicare Code Edits v33" zip file
• Select/open "ICD-10 Definitions of Medicare Code Edits_v33.0.pdf"

Noridian has received numerous calls from providers indicating many providers have internal firewalls that prevent downloading of these documents. Providers must work with their internal IT staff to download these documents.

The MCE lists each edit code requirement which CMS uses to avoid inappropriate payment on inpatient claims. Updates are made to the MCE on a quarterly basis. CMS publishes a comparison document which lists the quarterly changes made to the MCE manual for the specific year. Chapter 1: Edit code lists includes specific edit code lists used to find errors based on coding. The categories are:

• Invalid diagnosis or procedure code
• External causes of morbidity codes as principal diagnosis
  • Ensures external (V, W, X, or Y code) diagnosis codes is not listed as primary diagnosis code
• Duplicate of Primary Diagnosis
• Age conflict
  • Newborn diagnoses
  • Pediatric diagnoses (age 0 through 17)
  • Maternity diagnoses (age 12 through 55)
  • Adult diagnoses (age 15 through 124)
• Sex conflict
  • Diagnoses for females only
  • Procedures for females only
  • Diagnoses for males only
  • Procedures for males only
• Manifestation code as principal diagnosis
  • Manifestation codes not allowed as principal diagnosis
• Questionable admission codes
  • Lists specific diagnosis not usually sufficient to justify admission
• Unacceptable principal diagnosis codes
  • Requires secondary diagnosis code to support principal diagnosis
• Non-covered procedure codes
  • Always non-covered procedures
  • Non-covered procedures allowed with specific diagnosis
  • Procedures non-covered with specific diagnosis
  • Non-covered procedures based on age
• Invalid age and sex
  • Ensures the patient age is between zero years and 124 years of age and the gender is appropriate for the Diagnosis Related Grouper (DRG)
• Invalid sex
• Invalid discharge status
• Limited coverage
  • Reviews coverage for certain procedures where medical complexity and serious nature incur extraordinary associated costs. Medicare limits coverage to a portion of the cost
• Wrong procedure performed
• Procedure inconsistent with length of stay (LOS)
  • Only applies to 5A1955Z when LOS is four days or greater

Resources

• CMS 2016 Definition of Medicare Code Edits v33 [ZIP, 1MB]
• CMS Acute Inpatient Prospective Payment System (IPPS)
• CMS Addendum B
• CMS IOCE
• CMS OCE Quarterly Release Files